Credit Repair Options

Bankruptcy Credit Repair

Declaring bankruptcy is always a traumatic experience. It's not just about the money. It involves a great deal of personal and emotional turmoil, too. Fortunately, it's not the end of the world and, like many of life's most agonizing lessons, this too will pass. It'll just take some time.

The time it takes to recover from a bankruptcy may be a perfect opportunity to work on bankruptcy credit repair maneuvers that will help restore the bankrupt consumer's credit rating and score while building consumer discipline and self-confidence as well. The latest bankruptcy laws in the United States say a consumer can't file bankruptcy more than once in any eight year period. There's a lot that can be learned in eight years.

Federal bankruptcy laws in the US offer the troubled consumer several options by which to approach bankruptcy. These options are usually referred to by the chapter in the bankruptcy code under which they fall. Chapter 7, Chapter 11, and Chapter 13 are the three options most often used by individual consumers seeking personal bankruptcy protection. Details vary and one plan may work for an individual while the others will not.

Improving one's debt repayment habits goes a long way toward polishing a tarnished credit rating. During the period of bankruptcy resolution, the consumer will be required by court order to repay unliquidated debts on a regular and timely manner that usually extends for three to five years. Look toward this court-mandated period of fiscal responsibility as one of the most beneficial bankruptcy credit repair outcomes to be gained from filing for bankruptcy.

Consider this period of time as an opportunity to develop additional habits that lead to sound fiscal responsibility at the same time bankruptcy credit repair procedures are in practice. Pay utility bills on time. Catch up on student loan payments since they cannot be involved in bankruptcy proceedings. Don't apply for any new credit or revolving accounts. Work toward a better job. Reduce household expenses in as many areas as you can.

One of the most important things to do to increase one's financial standing is to make the debt-to-income ratio as small as possible. The more discretionary income a household enjoys, the higher the credit rating. And the less likely the need to revisit bankruptcy again eight years down the line.

Also, be vividly aware that predatory lenders know all about the eight-year waiting period required between bankruptcies. All court records, including bankruptcy filings, are public records, open to public view. Unscrupulous creditors routinely search these to lure new, and desperate, customers.

These creditors will bombard you with offers for credit cards, mortgages, car loans, and all sorts of other enticing offers that may seem almost too good to be true. And that's exactly what they are. Too good to be true. The fine print, which they do not expect you to read or understand, will lock you into contracts designed to confuse and trap you into financial crisis.

They do this because they know they can force you to make payments, including abusively high rates of interest, for at least the next eight years. They can earn a lot of money off your current financial distress but only if you fall for their sales pitches. One priority lesson to be learned from your bankruptcy credit repair experience is to take all unsolicited offers such as these and throw them immediately in the garbage can. Do not even open them.

At the beginning, eight years may seem like a very long time to have a black mark erased from your credit history but it really will pass before you know it. And, thanks to the bankruptcy credit repair lessons you will have learned along the way, you end up wiser, and probably richer, than you would have without filing.